New To Investing Thread

[catastrophe]

My total international funds are doing terribly, but I guess that’s the nature of a “hedge” when US stocks have killed it for so long.

I don’t expect I’ll invest in anything other than S&P 500 and Total US index going forward (although I did have some luck investing in a US growth fund for a 529).

And at least with Vanguard, I will say the one way mutual funds are superior to ETFs is you can auto invest a set amount of money every week easily, whereas for ETFs you have to first transfer money into a settlement account and go from there.

I guess I need to do more research on ETF vs mutual fund. Simplicity is really what I'm going for here.

The biggest downside to mutual funds is that the lowest fee ones (at least in Vanguard) are like $3k to initially invest. Otherwise you should be able to find one with similar fees and returns as other ETFs. VTSAX is what I use primarily for total stock market.

[catastrophe]

I think it has been discussed, but an s&p 500 fund is basically an international fund

Is this like a square is always a rectangle but a rectangle isn’t always a square? Cause in that case the rectangle I bought is losing my entire ass!

[steve dave]

My total international funds are doing terribly, but I guess that’s the nature of a “hedge” when US stocks have killed it for so long.

I don’t expect I’ll invest in anything other than S&P 500 and Total US index going forward (although I did have some luck investing in a US growth fund for a 529).

And at least with Vanguard, I will say the one way mutual funds are superior to ETFs is you can auto invest a set amount of money every week easily, whereas for ETFs you have to first transfer money into a settlement account and go from there.

I guess I need to do more research on ETF vs mutual fund. Simplicity is really what I'm going for here.

The biggest downside to mutual funds is that the lowest fee ones (at least in Vanguard) are like $3k to initially invest. Otherwise you should be able to find one with similar fees and returns as other ETFs. VTSAX is what I use primarily for total stock market.

On the fees I believe the Vanguard Admiral Shares require $10k min. At least they used to. They are also much slower to enter and exit and don't value throughout the day since they lack the T in ETF. This is actually what the dave ramsey's (complete psychopath) of the world like about mutual funds. it's the saving envelope of our personal finances or whatever crap they talk about and it's a pita to mess with.

[Kat Kid]

the vanguard mutual funds also don't let you sell and then re-buy them for like 30 days or something to prevent frequent trading.

I think the ETF actually has lower fees now unless you have $10,000 in there but there is almost no difference in practical terms.

[DQ12]

Correct. Just want to put in low cost, long term investments. Most I would want to do is move allocation between stocks/bonds down the road.
If my interests change later, i could see doing random things on the side.

You sound like me.  I park all my brokerage stuff (what I invest in excess of 401k/IRA contributions) in VTI on an ameritrade account.  It seems like a pretty safe and brainless way to do it.  That's the advice my dad gave me a long time ago, so I don't know if that's still a good place to dump it, but AFAIK (not much), it's still valid.

[catastrophe]

My total international funds are doing terribly, but I guess that’s the nature of a “hedge” when US stocks have killed it for so long.

I don’t expect I’ll invest in anything other than S&P 500 and Total US index going forward (although I did have some luck investing in a US growth fund for a 529).

And at least with Vanguard, I will say the one way mutual funds are superior to ETFs is you can auto invest a set amount of money every week easily, whereas for ETFs you have to first transfer money into a settlement account and go from there.

I guess I need to do more research on ETF vs mutual fund. Simplicity is really what I'm going for here.

The biggest downside to mutual funds is that the lowest fee ones (at least in Vanguard) are like $3k to initially invest. Otherwise you should be able to find one with similar fees and returns as other ETFs. VTSAX is what I use primarily for total stock market.

On the fees I believe the Vanguard Admiral Shares require $10k min. At least they used to. They are also much slower to enter and exit and don't value throughout the day since they lack the T in ETF. This is actually what the dave ramsey's (complete psychopath) of the world like about mutual funds. it's the saving envelope of our personal finances or whatever crap they talk about and it's a pita to mess with.

Since this impacts the people I care about most (me) I looked up the numbers:

VTSAX (Vanguard Total Stock Market Index Fund Admiral Shares)
(Minimum investment: $3,000)
Expense Ratio: .04%
1-yr average annual returns: 18.52%
3-yr: 19.85%
5-yr: 16.08%
10-yr: 15%
Since 2000: 8.25%

VTI (Vanguard Total Stock Market ETF)
Expense Ratio: .03%
1-yr average annual returns: 18.58%
3-yr: 19.82%
5-yr: 16.08%
10-yr: 14.99%
Since 2001: 8.67%

VOO (Vanguard S&P 500 ETF)
Expense Ratio: .03%
1-yr average annual returns: 23.30%
3-yr: 20.64%
5-yr: 16.73%
10-yr: 15.38%

So my takeaway is:
1. Pretty clearly no advantages to mutual funds OTHER THAN ease of recurring deposits
2. You can find a mutual fund with returns and fees in line with the best/most popular ETFs if you truly do want to set and forget it

[steve dave]

I also added some VUG after the recent gigantic bout of puking it did

[yoga-like_abana]

Going through not fun stuff with my mom. Things you should definitely get in order for yourself and make sure older people you have an interest in get things in order.
I'm late to the party in planning most of these things but a medicaid asset protection trust (irrevocable trust). Long term care insurance is unfortunately ungodly expensive or for the most part not available anymore through insurers. Insurance companies lost their asses on it.
Life insurance, term is great buy this crap out of it. Having an annuity or some permanent life insurance in place is also great.
Having a durable power of attorney and a will in place. Basically if you have not figured out a way to keep your nest egg you should do so today. 
Feel free to add or correct me on anything.

[steve dave]

Yes, good stuff. Avoid whole life would be my only edit. Sorry you’re going through that yla.

[yoga-like_abana]

Thanks. My only thoughts for a smaller inexpensive permanent policy that is either paid up over a certain amount of years or something of that nature would just be the immediate access to non taxable cash for beneficiaries. If someone has already paid for funeral and burial plot then not needed.  My stepdad passed away unexpectedly and that very low key funeral was well over $15k.

[steve dave]

2s through 30s all inverted 

[steve dave]

[Kat Kid]

I bet we go to 4,600 before 4,400

['taterblast]

2s through 30s all inverted 

i totally know what this means but can you explain for everyone else they probably need it

[Justwin]

2s through 30s all inverted 

i totally know what this means but can you explain for everyone else they probably need it

It's referring to inverted yield curves. Shorter term bonds have higher interest rates than longer term bonds. This is not typically the case.

The reason it's notable is that some people take it as a sign of an impending recession on the belief that it indicates investors, etc. believe that the Fed will have to lower interest rates in the future to combat a recession.

['taterblast]

so should i sell everything in my Roth right now and then BTFD later on after the recession kicks our asses

[Kat Kid]

It is a signal that the market expects economic growth to slow down. A recession is almost always preceded by an inverted yield curve but it usually does not happen right away and the last time it took 18 months (and a global pandemic).  It can take awhile for this to work out and I think we are more mid-cycle than late cycle so could be another 2-3 years easily and if people want to try and time it they are going to be much more miserable missing out on the gains in the meantime.

Anu Gaggar, global investment strategist for Commonwealth Financial Network, says that the 2-and-10 yield curve has inverted 28 times since 1900, and in 22 of those instances, a recession has followed.

https://www.kiplinger.com/investing/stocks/604484/inverted-yield-curve-stocks

[steve dave]

2s through 30s all inverted 

i totally know what this means but can you explain for everyone else they probably need it

short term debt has a higher interest rate than long term debt. why would you invest in a 10 year when you can get a bigger rate on a 2 year? it usually means bond investors expect lower interest rates further out. it's a fairly reliable indicator that economic growth is slowing. a lot of people tie it to an impending recession but that's overly dramatic imo. it's probably a bigger deal right now too because we've got Jerome getting ready to drop the 50 basis pt hammer 3 or so times in a row which will also slow down growth. but he's backed into a corner and has no other options because inflation is going crazy.

[Kat Kid]

I love that we got 3 different answers that all brought unique, accurate information. Good stuff folks.

[steve dave]

I love that we got 3 different answers that all brought unique, accurate information. Good stuff folks.

we really should all pat ourselves on the back more often because we are a great group of people for sure

[Justwin]

I love that we got 3 different answers that all brought unique, accurate information. Good stuff folks.

we really should all pat ourselves on the back more often because we are a great group of people for sure

Definitely could be cross-posted to the signs of getting old thread.

[Kat Kid]

bond yield talk on the old sports message board

[steve dave]

Candid shot I took of KK the other day

['taterblast]

so should i sell everything in my Roth right now and then BTFD later on after the recession kicks our asses

we will HOLD until further notice

[Kat Kid]

"I GIVE THE AUCTION ABOUT A C+, THE BUYERS CAME IN LATE BUT REMEMBER THE MARKET MAKERS ARE WAITING ON THE FED TO PICK UP THE SLACK"